A shopkeeper gives two consecutive discounts of 10% and 5% respectively on his items. He then adds 20% GST on his items. If an item has marked price 2,000, how much more or less of the actual price of the item a customer has to pay?

To find the final price, we apply successive changes to the marked price of 2,000. First, a 10% discount reduces the price to 1,800 (2,000 - 200). Next, a 5% discount is applied to this new value, resulting in 1,710 (1,800 - 90). Finally, a 20% GST is added to the discounted price, which is 342 (1,710 * 0.20), making the final amount 2,052. To determine the percentage change from the original marked price, we use the formula: ((Final Price - Original Price) / Original Price) * 100. This gives ((2,052 - 2,000) / 2,000) * 100 = 52 / 2,000 * 100 = 2.6%. Since 2,052 is greater than 2,000, the customer pays 2.6% more than the actual marked price. Successive percentage changes are multiplicative, not additive.

Sources

1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > 4.12 Goods and Services Tax (GST) > p. 173